Quantum: Preliminary Fiscal 1Q16 Financial Results

Quantum Corp. announced preliminary results for the fiscal first quarter 2016 ended June 30, 2015 (unless otherwise noted, all comparisons are relative to the fiscal first quarter 2015).

The company’s total revenue was approximately $111 million, down from $128 million a year earlier and below the company’s May guidance of $125 million to $130 million.

Quantum’s scale-out storage and related service revenue grew year-over-year by approximately $10 million, or 54%, and royalty revenue increased approximately $1 million. However, this growth was offset by product and related service revenue declines of approximately $15 million in branded tape automation, $7 million in branded devices and media and $6 million in OEM tape sales. DXi product and related service revenue was roughly flat year-over-year.

Quantum believes the lower-than-expected total revenue was largely due to overall weakness in the general-purpose storage market, as also indicated by other companies’ announcements over the last two weeks.

The lower revenue also impacted Quantum’s bottom line, resulting in a GAAP net loss of approximately $11 million for the quarter and a non-GAAP net loss of approximately $7 million.

“We’re pleased with our continued growth and momentum in scale-out storage but found the overall storage environment particularly challenging toward the end of the quarter,” said Jon Gacek, president and CEO. “Most notably, the market for data protection in IT data centers was especially soft, as customers seemed to pull back on planned purchases and pricing for low-margin devices and media was under significant pressure. Based on discussions we’ve had with partners and announcements by other storage providers, we believe the pull back in planned purchases was consistent with a broader industry trend. At the same time, we see significant opportunities for upside in scale-out storage that could more than offset weakness elsewhere, and we remain focused on meeting our annual financial targets announced in May. We will provide more detailed financial results for the fiscal first quarter and further discuss the market environment and our outlook in our earnings announcement at the end of the month.“